The future of the New Era Wind Farm (formerly Goodhue Wind) seems uncertain as the Minnesota Public Utilities Commission last week tabled the permits required to build the project. Will changes to the size, type and timing of the project affect its viability?

Under the microscope are: a certificate of need to build the 78-megawatt wind farm in Goodhue County, an application for a site permit and a request for approval of two contracts to sell the electricity from the wind farm to Xcel Energy.

Why reconsider now?

Delays to the construction of the wind farm have been many. Initially, the turbines were to be in production by Dec. 31, 2011. Financing issues, changes in ownership and controversy over the Avian and Bat Protection Plan submitted by the developer kept the project from moving forward. New Era Wind Farm missed extending the in-service date and still does not have a finalized contract with Xcel Energy to purchase the power.

The company requested an extension for operations to begin by the end of 2013 without further PUC hearings, but in light of the questions brought forward by public comment and legislators, the commission has decided to reexamine the merits of the project.

Four legislators representing Goodhue County and surrounding areas – Rep. Steve Drazkowski, Rep. Tim Kelly, Sen. John Howe and Senator Matt Schmit – filed comments urging the commission to take another look at the project’s eligibility as a Community Based Energy Development. The Goodhue County Board of Commissioners filed a request that the PUC reexamine the project’s C-BED status even before the board took final action to rescind an earlier resolution expressing county support for the project.

Locally owned?

Commenters claimed that all the original owners of the limited liability company that owned the wind farm had sold their interests to a single, out-of-state owner, eliminating the local ownership that had played a critical role in the finding that the project qualified as C-BED. Peter J. Mastic Holdings II, LLC, purchased full ownership of the project in 2012 from American Wind Alliance. The PUC docket notes that the project’s C-BED status had been central to the approval of its power purchase contracts with Xcel and the issuance of its certificate of need.

The original certificate of need was based on a finding that the project was a C-BED project. This determination was critical because the cost of the project’s power – and the price in the purchased power contracts with Xcel – was understood to exceed the cost of similar supplies from non-C-BED wind projects.

C-BED projects are permitted a reasonable price premium to meet government directives encouraging the development of locally owned renewable energy, assuming standard reliability and minimal impact on rates. Without C-BED status, the project may well have failed that standard.

Commenters also claimed that the project had lost the financing and turbine purchase agreements it had cited in support of its certificate of need application and no longer had adequate site control. The developer is in litigation with several landowners who had earlier signed leases to host wind turbines. Loss of site control could require reconfiguration of the wind turbines or even force resizing of the wind farm.

Eagles, bats and other wildlife questions

At the Feb. 28 PUC hearing, members of the public urged re-examination of the wind farm’s potential benefits based mainly on the project’s performance in evaluating and responding to environmental issues.

The PUC statement records… “members of the public claimed that project consultants on wildlife issues had often undercounted – or failed to count entirely – eagles, bats, loggerhead shrikes, trumpeter swans, and other wildlife. Some claimed there was a history of mistrust and conflict between local residents and the project on wildlife protection issues, land lease issues, and other issues. They claimed that the project was unwilling to commit to following the recommendations of the Minnesota Department of Natural Resources and the U.S. Fish and Wildlife Service.”

Remaining questions

Through April 3, the PUC has been accepting comments on the issues at hand, to be followed by 14 days for reply comments. Among the issues:

Does the project still meet C-BED status, and if it doesn’t, can it still meet the requirements for the original certificate of need?

Does the project currently have in hand the land leases, easements, and wind rights required to construct the 78-megawatt wind farm for which it received a certificate of need?

How would changes to the size of the project affect the wildlife and Avian and Bat Protection Plan?

What is the expected in-service date, and when do the parties anticipate the conclusion of the negotiations between the developer and Xcel regarding the power purchase agreements.

Following this timeline, the commission will meet again to determine whether it can make a final decision on the basis of the existing record, or if it must refer the case to the Office of Administrative Hearings.

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